General Motors is increasing several financial targets for 2024 following a strong second-quarter performance that exceeded Wall Street expectations.
The Detroit automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from previous estimates of $12.5 billion to $14.5 billion. It has also adjusted targets for operating cash flow and earnings per share, although expectations for net income attributable to shareholders have been slightly lowered to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the $45 billion anticipated by analysts, according to FactSet. Earnings per share were reported at $3.06, exceeding the expected $2.71 and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the stock has seen an overall increase of more than 37% this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, which contributed to the stock’s upward movement.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with gas-powered trucks and SUVs and mentioned that eight new or redesigned vehicle models are set to launch in North America. She also pointed out that production of the electric Chevrolet Equinox is being scaled up, expressing commitment to achieving disciplined volume growth in the electric vehicle (EV) sector despite earlier remarks indicating that GM may not reach its target of producing 1 million EVs in North America by the end of 2025 due to market slowdowns.
Additionally, Barra announced that Cruise, GM’s self-driving unit, will replace its Origin vehicle with the next-generation Chevrolet Bolt for testing in Texas and Arizona, following setbacks with the Origin’s deployment. GM incurred a $600 million charge due to the suspension of Origin production.
In a call with analysts, Barra emphasized that shifting to the Bolt would address regulatory concerns about the Origin’s design, which notably lacks a steering wheel. This change is expected to lower per-unit costs and enhance resource allocation.
Finally, GM is also working to restructure its joint venture in China with SAIC Motor amid ongoing losses; the company reported a $104 million loss in the second quarter alone. Production cuts were implemented by SAIC-GM in June, resulting in a 70% reduction and delivering just 26,000 vehicles, a decrease of 50% compared to the previous year.